It noted that technical indicator based on relative strength index
continued to trend up after recently recovering from the oversold level.
"The recent relief is natural as the daily RSI (relative strength index
) indicator has reached the oversold territory but no signs of reversal have been spotted yet, knowing that the next support level comes at 9,500 points before 9,270 points," Kamco said in its technical analysis.
The 14-day relative strength index
for Brent was 20.7328 today and has been below 30 since Sept.
The measure's 14-day relative strength index
stayed above 70, the level that typically indicates a drop.
The 60-day relative strength index
shows equities barely above fair value and while the 50-day moving average remains in support and a sideways market is the most likely scenario, according to strategists.
The FTSEurofirst 300 index was also nearing "overbought" levels, with its Relative Strength Index
(RSI) - a technical momentum indicator that determines overbought and oversold conditions - having hit 68.7.
The Korea Composite Stock Price Index (KOSPI) finished down 0.03 per cent at 2,197.82 points, and the KOSPI's 20-day relative strength index
hit 75, above the overbought territory mark of 70.
Welles Wilder and introduced in his 1978 book, New Concepts in Technical Trading Systems, the Relative Strength Index
(RSI) is an extremely useful and popular momentum oscillator.
Over the next few hours of trading, the rise in global equities paired with higher commodity prices may drive the GBP/JPY higher to retrace the decline from earlier this month but at the same time, as the relative strength index
continues to push into overbought territory, gains are likely to be capped, and we may see the pair fall back to cover the gap from the 120 SMA at 152.86.
The four-hour chart has long shown oversold conditions -- the Relative Strength Index
falling below 30.
Papa Securities expects more of these short-term periods of strength in the coming days especially with the divergence situation of the relative strength index
, a key technical indicator, remaining intact.
Weekly relative strength index
indicator is currently looking bearish, while the daily one is also negative but resides in the oversold territory," Kamco said in its technical analysis.